NEW YORK -- Nike Inc. inched closer to reaching its target of mid-teen earnings growth for the full fiscal year as it reported that second-quarter revenues increased 7 percent to $2.2 billion, with a boost occurring in the firm's international business.
For the quarter ended Nov. 30, 2000, the Beaverton, Ore.,-based firm revealed net income totaled $119 million, from $108 million, while earnings per share were up 16 percent to 44 cents.
In the United States, revenues increased 5 percent to $1.13 billion, as athletic footwear declined 2 percent to $705 million.
Meanwhile, worldwide future orders for footwear and apparel -- scheduled for delivery between December 2000 and April 2001 -- totaled $3.6 billion, down 1 percent.
Most notable was the company's performance overseas, where revenues grew 41 percent during the quarter. In the European market, which also includes Africa, Nike's footwear revenues increased 3 percent. Similarly, the company continued its recovery in the Asia Pacific region, with revenues growing 22 percent in constant dollars.
Nike's stock price-earnings ratio now trades at 21 times the calendar-year 20O1 APS estimate of $2.55 per share, according to Bank of America Securities analyst Susan Silverstein.
'These results mark another important step in our transformation to a global brand with a diverse portfolio of businesses focused on consistently strong earnings growth,' noted CEO and Chairman Phil Knight. 'We have achieved this while continuing to make the evolutionary changes in our business that will position us for sustainable profit growth.'
Despite the growth, Silverstein last week downgraded Nike's stock from 'strong buy' to 'buy,' citing share-price appreciation. Silverstein said she was compelled to downgrade the stock after it traded through the brokerage firm's $51 near-term price target, and is approaching the previous long-term price of $57.
However, she noted 'if most of the stars line up for Nike,' the firm's stock could appreciate toward $65.
As Nike's earnings continue to plump up, the firm also is looking for new ways to expand its market share and visibility. The company scored a major play when its Nike Team Sports division became the sole licensee for the top four post-season college football bowl games. NTS produced championship caps and T-shirts for the winning teams of the Orange, Sugar, Fiesta and Rose Bowls.
A complete assortment of Nike Bowl Championship products for each winning team -- including hats, T-shirts and sweatshirts -- also hit retailers such as Fort Lauderdale, Fla.,-based The Sports Authority.
'This is a big deal in college sports, and it puts Nike on the field and speaks to the authenticity of the brand,' said NTS spokesperson Monica Rigali. 'Our message has always been athletes first, and to be hand-in-hand with the national champion football team speaks to where we are as a brand and where we want to be.'
Nike also recently inked a three-year partnership to be the official apparel supplier to the Canadian Snowboard Federation. Beginning this season, 40 men and women riders on the Canadian National, Development and Junior teams will don Nike All Conditions Gear apparel.
'CSF is one of the finest snowboarding organization in the world,' noted Vitalis Gomes, category manager for Nike Canada Ltd. 'Our partnership with them is a huge win for us and ensures that some of the best snowboarders in the world will be putting Nike ASG performance snowboarding gear to the test.'
